Archive for December, 2011

Holiday Hazards

Dec. 22nd, 2011

Each year, over 12,500 Americans are rushed to the emergency room due to holiday related accidental injuries, according to the US Consumer Product Safety Commission. With caution and due diligence, these accidents can be avoided.

Marcellus Shale Natural Gas Boom

Dec. 19th, 2011

Pennsylvania’s natural gas boom has driven local gas prices down, which in turn, has resulted in increased industrial development. According to a Public Utility Commission calculation, the decrease in natural gas prices has saved Pennsylvania energy consumers $13 billion in the last two years. A recent report from the U.S. Energy Information Administration stated approximately 17 percent of Pennsylvania’s energy is generated by natural gas, which is a ten-fold increase since 2001. In addition, natural gas plays an important role in the production of steel, according to U.S. Steel CEO, John Surma. “The low-cost energy really turns out to be an unbelievable asset for this state,” said C. Allen Walker, Economic Development Secretary. Although the price of natural gas has fallen due to the unexpected increase in production, the lower prices come with a risky downturn. Shale gas will no longer be profitable if the price continues to sink. Right now the prices have fallen below $4 per thousand cubic feet. According to Louis D’Amico, president and CEO of Pennsylvania Independent Oil and Gas Association, “we’ve been a victim of our own success…it’s a very low number for this industry to make a profit on dry gas.” The shale has exceeded all production expectations. Because of that, several petrochemical producers have expressed interest in the Marcellus Shale. Walker states, “Pennsylvania is in play for several large projects.” However, since the decline of gas prices, D’Amico says that we will “see a lot of money shifting into liquids-rich areas…shale wells have a very rapid decline [in production]-any reduction in the number of wells will have a very quick response time to impact the economy.” Most gas that is produced by a shale well comes out of the ground in the first two or three years after drilling. Even if there is a slowdown in development, Sue Mukherje, Director of Workforce Development for the Pennsylvania, Department of Labor and Industry, states that the economic ripple effects through other industries are significant. According to Mark Lauriello, President of Rettew Associates, Marcellus has transformed his mid-state engineering and consulting firm, which has added 210 jobs since January of 2010. Although we do not know how long this will last, Pennsylvania’s economy has shifted and they are hoping it is for at least “a good ten years.” Natural gas producers already invested more than $4 billion in Pennsylvania lease and land acquisition, new well drilling, infrastructure development and community partnerships, with an even greater investment expected in the future. Resources: http://www.pennlive.com/midstate/index.ssf/2011/12/marcellus_shale_natural_gas_bo.html

The Current Status of the Keystone XL Pipeline

Dec. 9th, 2011

In 2008, TransCanada Corporation proposed a plan for the longest pipeline in North America, the Keystone XL Pipeline. The pipeline is estimated to be 1,661 miles or 2,663 kilometers. With a starting point in Alberta’s oil sands, the Keystone XL Pipeline would carry the tar-sands crude through the Great Plains to the Gulf of Mexico. Canada is currently considered the largest source of imported oil to the United States having produced 1.5 million barrels a day in 2010 and a projected production exceeding 2 million by 2015. The Keystone XL has the potential to increase the pipeline capacity by 700,000 barrels per day. An independent study provided by TransCanada found that the $13 billion pipeline project will produce a U.S. economic value of $20 billion. The U.S Department of State has been working closely with a number of agencies to ensure that the development process addresses any concerns regarding environmental and safety issues. With assistance from the Environmental Protection Agency (EPA), the Department of Transportation’s Pipeline and Hazardous Materials Safety Administration (PHMSA), and the Department of Energy, the State Department worked to address concerns from the public. Since the beginning of the project in 2008, public meetings and open houses have taken place in six states collecting pages of information and responses to questions. There have been a number of concerns from numerous environmental organizations regarding the safety measures should an incident occur. This has stalled the project for the time being. TransCanada stated they plan to construct one of the safest, well planned pipelines in use today. A computerized control center that is manned 24 hours a day and 365 days a year will monitor every aspect of the steel pipeline. Should an incident occur, isolation and shut down of the affected section would be immediate due to controls and monitors placed throughout the pipeline, as well as remote access to secure the site. Due to a PHMSA requirement, TransCanada has created an Emergency Response Plan (ERP) that will be initiated to minimize effects to the surrounding area. The plan incorporates its own personnel as well as contract resources. Where does it go from here? As of December 7, 2011 President Obama had yet to approve the Keystone XL plan. In November, the State Department announced that a final decision regarding the pipeline will not happen until an environmental analysis is done on a new route through Nebraska that will bypass its Sand Hills region. This will most likely push the final decision into 2013. Resources: http://www.keystonepipeline-xl.state.gov http://www.nytimes.com/2011/11/15/science/earth/keystone-xl-pipeline-transcanada-reroute.html www.politico.com/news/stories/1211/69988.html http://transcanada.com/5893.html http://www.transcanada.com/keystone.html

Oil Rig Counts on the Rise in the US

Dec. 5th, 2011

The Baker Hughes weekly rig count reported the United States currently has 2000 rigs actively exploring for oil and natural gas, an increase of 313 rigs from this week last year. Of these working rigs, 1,130 are drilling for oil and 865 are used in gas extraction. The rig count, which has been issued since 1944, acts as an important index for drilling contractors in gauging the overall business environment of the oil and gas industry. The rig counts are reaching record numbers in the Permian Basin. “We have 400 drilling rigs running around Odessa and Midland that are drilling two wells per month at an average cost of $2 million per well,” said Kirk Edwards, President of MacLondon Royalties and prior President of the Permian Basin Petroleum Association. The current rig count in the Permian is sixty percent higher than the oilfield’s count in August of 2008. Oklahoma-based contract driller, Helmerich & Payne, has purchased 17 new rigs, forecasting an increased demand in this oil and gas drilling boom. The company has set their capital expenditure for 2012 at $1.1 billion, a 58 percent increase from 2011, and has advised three- fourths of the budgeted amount will be spent on new rigs. A company executive at Helmerich & Payne stated “We see a lot of demand in Eagle Ford and the Permian and the Bakken, so you would think there could be rig count growth.” As oil and gas companies continue to move into the oil and liquid rich shales across the US, the demand and production for oil rigs will continue its upward trajectory. Resources: http://www.oaoa.com/news/counts-76689-rig-basin.html http://www.reuters.com/article/2011/11/17/helmerichpayne-idUSL3E7MH1WA20111117 http://fuelfix.com/blog/2011/11/24/weekly-us-oil-and-gas-rig-count-drops-by-1/ http://www.bakerhughes.com/rig-count

December 2011 Press Releases

Dec. 1st, 2011

ISN Hosts 10.0 Regional Workshops Throughout Canada and Australia Stantec Selects ISNetworld for Subcontractor Management Severstal North America Selects ISNetworld for Contractor Management ISN 10.0, the latest version of ISNetworld, is now available